US data center construction starts hit $22.3 billion in June, the second-highest month on record, taking the year-to-date total to $81.5 billion, already past all of 2025 with half a year still to run. The number contractors should sit with is the cost: the median build now runs $570 per square foot, up 38% in a year, with the average at $859 and a long tail of projects above $1,000. This is ConstructConnect’s read, and the data says the constraint is shifting from how much demand exists to what it now costs to build.
Data center numbers have a way of blurring into background noise. Another record month, another eye-watering total, another hyperscaler announcement. The August report from ConstructConnect, written by chief economist Michael Guckes and associate economist Devin Bell, is worth reading closely because the interesting movement is no longer only in the demand column.
Starts are still climbing, and fast. But the cost line has moved just as sharply, and it is the one that lands directly on a contractor’s bid. Read together, the two tell a cleaner story than any single headline: the sector is building more, at larger scale, and paying dramatically more per square foot to do it.
The starts data
$81.5 billion in six months, already past all of last year
Data center spending totaled $22.3 billion in June, the second-highest monthly figure ConstructConnect has recorded, behind only January’s $25.5 billion. Year-to-date starts through June reached $81.5 billion, which already clears 2025’s full-year total of $72.5 billion and runs more than three times the 2024 figure.
The volume is spread across a growing number of ever-larger builds. 116 projects broke ground in the first half of the year, 23 of them in June alone. The average data center has more than doubled in size since 2022, reaching close to 700,000 square feet by the second quarter of 2026. More projects, bigger footprints, and a spending curve that has roughly doubled most years since 2021.
The cost data
Median $570, average $859, and a very wide spread
Here is the line that matters for anyone pricing this work. Across data center projects larger than 2,000 square feet, with the top and bottom 10% trimmed, the year-to-date median construction cost is $570 per square foot and the average is $859. Against 2025’s median of $415 and average of $514, that is a jump of 38% and 67% respectively in a single year.
The gap between the median and the average is the tell. It reflects a cluster of very high-cost projects, many reporting costs well above $1,000 per square foot even after the trim, that drag the average up and away from the typical build. Over five years, median and average costs have risen 17% and 22% on a compounded annual basis, so the one-year spike sits on top of an already steep trend.
- Median. $415 to $570 per square foot, up 38% year on year.
- Average. $514 to $859 per square foot, up 67% year on year.
- The tail. Many projects report well above $1,000 per square foot even after trimming outliers.
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Where the work is going
The South and Midwest, chasing power and water
The map is shifting with the money. North Carolina, Indiana, Illinois and Michigan have each recorded more than $10 billion in new starts year-to-date, with Virginia and Texas close behind. Activity is moving toward the South and Midwest as developers hunt for sites with the power and water these facilities need.
That migration is not incidental to the cost story. Power-connected sites are gaining a clear edge as developers race to lock in reliable capacity before breaking ground, and location is increasingly a variable in the build cost rather than a fixed backdrop. Where a project sits now shapes what it costs to energize and, in turn, what it costs to build.
What the numbers mean for contractors
Read the spread, not just the headline
The first practical takeaway is that “data center cost” is not a single figure. A hyperscale AI build and a smaller colocation facility sit far apart, and the distance between the $570 median and the $859 average is the proof. Benchmarking a bid against the median when the job is really in the high-cost tail is a fast way to underprice it.
The second is that cost assumptions age quickly right now. A 38% median jump in twelve months means numbers carried over from last year’s project are already stale, and the compounded five-year trend suggests the direction is not about to reverse. For contractors, the report reads less as a demand signal, which is plainly strong, and more as a reminder that estimating discipline and current cost data are doing more work than they were even a year ago.
| Metric | 2025 | 2026 (YTD) |
|---|---|---|
| Median build cost, per sq ft | $415 | $570 |
| Average build cost, per sq ft | $514 | $859 |
| Data center starts | $72.5bn (full year) | $81.5bn (through June) |
| Average project size | Smaller | ~700,000 sq ft |
Year-to-date starts through June reached $81.5 billion, which already exceeds 2025’s full-year total of $72.5 billion and runs more than three times the 2024 figure. June alone saw $22.3 billion, the second-highest month on ConstructConnect’s record behind January’s $25.5 billion. 116 projects broke ground in the first half of the year. (Source)
For projects larger than 2,000 square feet, with the top and bottom 10% trimmed, the year-to-date 2026 median is $570 per square foot and the average is $859. The figures come from ConstructConnect’s August 2026 report, prepared by chief economist Michael Guckes and associate economist Devin Bell. (Source)
Because a group of very high-cost projects pulls the average up. Even after trimming the top and bottom 10%, many builds report costs well above $1,000 per square foot, which widens the gap between a typical project (the median) and the mean. In practice, it means AI-scale facilities and standard builds now sit far apart on cost. (Source)
The median rose 38% and the average 67% against 2025’s figures of $415 and $514 per square foot. Over a longer horizon, median and average costs have climbed 17% and 22% on a compounded annual basis over five years, so the recent jump extends an already steep trend rather than breaking from it. (Source)
North Carolina, Indiana, Illinois and Michigan have each logged more than $10 billion in new starts year-to-date, with Virginia and Texas close behind. Activity is shifting toward the South and Midwest as developers seek sites with the power and water needed to support AI workloads. (Source)
Two things. First, treat “data center cost” as a range, not a point: the gap between the median and average shows how far a hyperscale AI build sits from a standard one, so benchmark against the right comparable. Second, refresh cost assumptions often, because a 38% median jump in a year makes last year’s numbers unreliable. The demand is not in doubt; the estimating discipline is where the risk now sits. (Source)
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